MinervaQ4 loss reported

fleischwirtschaft.com — BRAZIL, Barretos. Minerva Foods, a leading producer of fresh beef and leather in South America, reported a net loss of $97 mill. in the fourth quarter of 2017 and $226.4 mill. for the year.

The acquisition in 2017 of South American beef operations previously owned by JBS S.A. coupled with foreign exchange fluctuations weighed on results. JBS sold its beef operations in Argentina, Paraguay and Uruguay to Pul Argentina SA, Frigomerc SA and Pulsa SA, respectively, for a total of $300 mill. The companies are controlled by Minerva.

The acquisition created negative operating cash flow. During the integration process, Minerva focused on reducing working capital requirements to improve the cash conversion cycle at the acquired business units.

Fourth-quarter net revenue came to $1,23 mill., an increase of 55.1% from the year-ago period. Net revenue for the full year, excluding the Mercosur plants, totaled $3,75 mill., 25.4% higher compared with 2016.

The company’s Beef Division generated gross revenue of $3.07 bn. in 2017, up 18.6% compared with 2016. Both domestic and export markets contributed to results. Gross revenue from the Beef Division came to $2.11 bn. in the export market, an increase of 19.5% over 2016, and $0.96 bn. in the domestic market, which was 16.7% more than in the previous year.

“As of the second half of the year, following the consolidation of the new assets, the division’s sales mix had a higher share of exports,” the company explained. “As the company accelerated the integration process and increased the capacity utilization level of the new units, both exports and domestic sales grew consistently in 4Q17, around 70% and 50%, respectively, over 4Q16.

“The recovery of consumption in Brazil and the addition of the Argentine operations boosted Minerva’s domestic sales,” Minerva added. “Also, the company resumed operations at the Mirassol D’Oeste unit in Brazil as of August, with a total capacity of 1,100 head of cattle per day, in line with the same period in 2016, partly allocated to domestic sales.”

Minerva Foods is one of the leaders in South America in the production and sale of fresh beef and leather, as well as live cattle and cattle byproduct exports. It also operates in the processed foods segment in Argentina and Brazil, selling its products to more than 100 countries. With units in Brazil, Paraguay, Argentina, Uruguay and Colombia, Minerva operates 26 slaughtering and deboning plants and three processing plants. It has a combined slaughtering capacity of 26,380 head of cattle per day.